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Old 12-05-2008, 04:56 AM   #1
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Default $25 per barrel of oil possible in 2009

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Oil May Fall Below $25 Next Year, Merrill Lynch Says (Update1) By Grant Smith
http://www.bloomberg.com..oil

Quote:
Dec. 4 (Bloomberg) -- Crude oil may dip below $25 a barrel next year if the recession that’s slashing fuel demand around the world spreads to China, Merrill Lynch & Co. said.

Global oil demand will contract in 2009 as economic growth slows to its weakest since 1982, Merrill Commodity Strategist Francisco Blanch said in a report today. In October, when oil was around $100 a barrel, the bank predicted that prices may slide to $50. Crude traded at $45.30 in New York today, the lowest since February 2005.

“A temporary drop below $25 a barrel is possible if the global recession extends to China and significant non-OPEC cuts are required,” Blanch said. “In the short-run, global oil demand growth will likely take a further beating as banks continue to cut credit to consumers and corporations.”
Quote:
Merrill reiterated a Nov. 26 forecast that oil futures traded in New York will average $50 a barrel next year. Prices “could find a trough” at the end of the first quarter and undergo a “modest recovery” in the second half as economies strengthen, according to today’s report.
Quote:
Merrill’s $50-a-barrel assessment for 2009 is the second- lowest among 32 analyst estimates compiled by Bloomberg, after a prediction of $43.13 by ANZ Banking Group Ltd. issued on Nov. 18.
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Old 12-05-2008, 06:14 PM   #2
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Default Re: $25 per barrel of oil possible in 2009

Shame our dollar is so tied into the price of oil (and other commodities). As oil prices fall so does the loonie , compared to the US greenback . We're trying to do the math on a trip to the US southwest around Christmas, to see if the cheaper gas offsets the weaker Canadian dollar. We're just beginning to settle in at, or a little below, zero as our daytime high temperature around the Niagara area, so we may just go anyway to get to a warmer clime . We were thinking southern Arizona or Texas or thereabouts (maybe even California ).
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Old 12-06-2008, 04:08 AM   #3
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Default Re: $25 per barrel of oil possible in 2009

From CNN Dec 5, 2008

Quote:
The plummeting price of oil has sent the price of gasoline in the U.S. sliding more than $2 a gallon, as consumers and businesses cut back on expenses. Gas prices declined for the 79th day in a row Friday to a national average of $1.773 a gallon, according to motorist group AAA.
According to MS Streets & Trips 2007, if you get 15mpg, a drive from Niagara Falls to Phoenix, Arizona (3654 kilometers) - the cost for fuel is US$268.00 (CDN$340.00) with gas at US$1.77 per gallon.

I think that US$1.77 per gallon gas equals US$0.47 cents or CDN$0.60 cents per litre using todays exchange rate. Even with the $1.27 exchange rate, gas in the US costs less than gas here.
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Old 12-06-2008, 01:46 PM   #4
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Default Re: $25 per barrel of oil possible in 2009

I believe it's ALWAYS been cheaper in the U.S. for gas. Is that 15mpUSg? No matter how you slice it. I'm not 100% sure, but it seems to get cheaper as you approach the states (nearer the Gulf maybe?) with lots of refineries. Probaly due to less state lines to cross and have fewer shipping taxes added to the product? Perhaps someone from the US could comment on this (bold) assumption?
I always wondered what type of gallon the Roadtrek's mileage was based on in their estimates. I assumed it was per U.S. gallon.
We've actually averaged around 18 mpCg on the highway at 60mph on our first 2 trips with the Chevy 350CID engine
and the 123D transmission in the "D" position. I guess that would translate roughly to 15mpUSg, which is I think what they estimate in their brochures?

Still thinking about getting south. It snowed here overnight. Temp is -4C at 08:46 a.m.
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Old 12-07-2008, 04:41 AM   #5
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Default Re: $25 per barrel of oil possible in 2009

The way I just figured it out was at todays price of a litre .70 cents.
If I fill my 135 litre tank it would cost me $ 94.00 Canadian.
If I fill the same 35 gallon tank at a $1.70 US it would cost $59.50 x $1.25 exchange comes to $74.00 Canadian. I would therefore save $20.00 on a tank.
Hope I got that figured out right.
I always found gas cheaper in the US when travelling there, even with the exchange rate.
We are also thinking about going south at this rate.
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Old 12-07-2008, 02:48 PM   #6
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Default Re: $25 per barrel of oil possible in 2009

Sounds about right to me. A US gallon is about 3.8L where our Imperial is about 4.5L. At $1.70 per US gallon, they're paying about $0.45US/L. Times 135 litres (your tank size) is about $61 US. Times today's (actual from XE.COM) exchange rate of 1.27 is around $77 Cdn. I found it easier to convert price per gallon to price per litre (never thought I'd ever say that ), X 135 and then do the exchange rate calculation.
(Useful?) links to volume conversion and exchange rate tables....
http://www.onlineconversion.com/volume.htm
http://www.xe.com/ucc/
Again, no matter how you slice it, gas is cheaper in the States. God bless their little hearts.

Marko mentioned a fuel cost estimator on the software he used to do the calc for me from Niagara Falls to Phoenix AZ.
I tried the (new?) one built into Mapquest and it came up with roughly the same number (+ or - a dollar or two). Kinda useful, imho.

It's windy, cold, and snowy in Niagara right now.
My wife keeps looking at the weather network for temperatures at places along the Gulf coast of the US.

I think we'll be on our way sooner rather than later.......
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Old 12-11-2008, 04:14 PM   #7
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Default Re: $25 per barrel of oil possible in 2009

Apparently $20 per barrel is possible.

http://www.financialpost.com/story.html?id=1059758

Quote:
Philip Verleger, of the Haskayne School of Business in Calgary, said yesterday that oil could go to $20 a barrel as the economic slowdown drags on through the next year or more. Price recovery could take few years, before oil returns to "normal" levels.
I'm thinking about going to places that were previously too expensive because of the price of fuel to drive to. Now I just need to find the time to do it.
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Old 12-11-2008, 04:32 PM   #8
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Default Re: $25 per barrel of oil possible in 2009

I hear you on that one. Our biggest headache (still) is finding cat-sitting or a place to board them that won't cost more than our trip. We'd like to head south again, but we don't want to abuse the kindness of a friend who took care of the cats the first 2 trips. They just don't travel well, and my better half doesn't want to bring them along, although I think they'd get used to it over time. However, I'm overruled on that one (for now).
Actually, we might have to drive to Mexico to get any kind of decent/warmer weather. I just saw New Orleans covered in snow (first time since Dec. 25, 2004 apparently?). Wonder how the US southwest is weather-wise this time of year? Any Texans/New Mexicans/Californians/Nevadans/Arizonians care to comment ? Florida might be warmer, near The Keys, but we really like the southwest better.
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Old 12-11-2008, 10:05 PM   #9
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Default Re: $25 per barrel of oil possible in 2009

Houston "normally" is 62º on Christmas Day - of course it snowed here yesterday (Wed, 11 Dec) - dry and sunny today (Thurs) - temps around freezing overnight and in the mornings - afternoons = 40s
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Old 12-14-2008, 01:40 AM   #10
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Default Re: $25 per barrel of oil possible in 2009

Ok, how about $10 per barrell...............

Quote:
Oil May Crash to $10 a Barrel
Oil prices may crash as low as $10 a barrel, says Devina Mehra, chief strategist at First Global. She explains her extremely bearish outlook on oil, with CNBC's Martin Soong & Sri Jegarajah.
CNBC Video:
http://www.cnbc.com/id/15840232?video=960474937&play=1

Actually she says $10 to $30 in the interview.
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